The volume of money spent worldwide is expected to skyrocket over the next five years.
According to a study performed by IDC Financial Insights, the mobile payments volume by 2017 will have reached over a trillion dollars, and this will be merely the tip of the iceberg as to the size it will achieve in the years that follow.
The majority of the spending will be through mcommerce, according to IDC.
The report based on the study also indicated that NFC mobile payments will eventually begin to gain popularity as a point of sale transaction option. It feels that as the technology itself begins to become more common among smartphones, it will grow to become the second largest category in the sector. P2P funds transfers will be a distant third, primarily because there have not been any standards established.
Though IDC has predicted a trillion dollar mobile payments figure, this is a fragment of the full potential.
In fact, the company has said that it feels that this is only 2.5 percent of the total worldwide mcommerce amount that could actually be achieved for mobile payments in the next five years. However, it says that further growth would depend on a number of significant changes, such as cooperation among retailers, wireless operators, and financial institutions.
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IDC feels that if common standards are not set across the industry, mobile payments will be held back significantly. The current path of the sector shows that every brand is headed in its own direction. Therefore, as a whole, it is underperforming and will not take off to its full potential until consumers start to see some uniformity from one service to the next.
Regardless of the competition that is being created by new entrants to the industry, IDC says that the outlook for mobile payments is strong for financial institutions. It says that the majority of the transactions are being driven by way of traditional credit and debit cards through both NFC and mcommerce.
The report suggested that financial institutions could, therefore, see mobile payments as the chance to leverage the data that they already have about the shopping habits of their customers, as well as their demographics.